Bitcoin is ‘a dinghy in the open ocean’

Record-breaking Olympic champion Michael Phelps (top R) and members of the U.S. National Swim Team participate in Surf Passage at Naval Special Warfare Center at Naval Amphibious Base Coronado, California, March 19, 2009.

But Andy Bryant, the European COO of bitcoin exchange BitFlyer, says that the current volatility is simply a symptom of bitcoin’s evolution and will not be a permanent feature.

“Of course, objectively, bitcoin is volatile,” Bryant told Business Insider. “But when I talk about volatility I like to zoom out a bit and take a step back. Bitcoin as an asset class is still only, give or take, $200 billion. Cryptocurrency as a whole, including bitcoin, is $600 billion.”

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Andy Bryant, COO of BitFlyer Europe.

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BitFlyer

“If you look at just one company, Apple, they’re $900 billion. Bitcoin is less than a quarter of an Apple. It’s only two Warren Buffetts.

“The point of all this is if you take just one of those things, for example, the foreign exchange market. I liken those assets to like an oil tanker on the open sea. When you have an oil tanker and you have waves of capital sloshing in and out, the oil tanker will barely budge.

“Bitcoin, relatively speaking, is like a dinghy. The same walls of money coming and going are going to cause it to bob up and down. That’s how we see volatility.”

Bryant’s point is that the bitcoin and cryptocurrency markets are relatively small, so market moves create outsized price shifts compared to other asset classes. He expects bitcoin’s volatility to decrease as the cryptocurrency becomes more mainstream.

“It’s simply a sign of bitcoin’s relative youth compared to other asset classes and as bitcoin continues to enter the mainstream we’d expect the volatility to decrease,” he told BI.

“I think it’s going to be a big year. I think we’re going to see more futures products come online, we’re going to see potentially the first proper ETFs come online, we’re going to see more funds announcing that they’re going to invest even just a tiny piece of their portfolios into cryptocurrencies.”